What Happens After a Technology Shock? [report]

Lawrence Christiano, Martin Eichenbaum, Robert Vigfusson
2003 unpublished
We provide empirical evidence that a positive shock to technology drives up per capita hours worked, consumption, investment, average productivity and output. This evidence contrasts sharply with the results reported in a large and growing literature that argues, on the basis of aggregate data, that per capita hours worked fall after a positive technology shock. We argue that the difference in results primarily reflects specification error in the way that the literature models the low-frequency component of hours worked.
doi:10.3386/w9819 fatcat:wixiorarqzeitf635vvtj46c7e